Working Paper: CEPR ID: DP14726
Authors: Lorenz Brachtendorf; Fabian Gaessler; Dietmar Harhoff
Abstract: Standard-essential patents (SEPs) have become a key element of technical coordination in standard-setting organizations. Yet, in many cases, it remains unclear whether a declared SEP is truly standard-essential. To date, there is no automated procedure that allows for a scalable and objective assessment of SEP status. This paper introduces a semantics-based method for approximating the standard essentiality of patents. We provide details on the procedure that generates the measure of standard essentiality and present the results of several validation exercises. In a first empirical application we illustrate the measure's usefulness in estimating the share of true SEPs in firm patent portfolios for several mobile telecommunication standards. We find firm-level differences that are statistically significant and economically substantial. Furthermore, we observe a general decline in the average share of presumably true SEPs between successive standard generations
Keywords: patents; standards; standard essentiality; standard-setting organizations
JEL Codes: L24; O33; O34
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| semantic similarity score (C52) | likelihood of a patent being classified as standard essential (L15) |
| declared SEPs (F50) | semantic similarity to associated standards compared to control patents (O34) |
| identification of true SEPs (F50) | reduction in transaction costs in licensing negotiations (L24) |
| firm-level differences in share of true SEPs (L25) | proportion of true SEPs (C20) |
| successive generations of standards (L15) | average share of presumably true SEPs (C46) |